Bill backed by Missouri co-ops would allow new limitations on net metering

Missouri’s electric cooperative association is promoting legislation that would make a raft of changes that could render net metering less available and more costly.

Although being advanced by the state’s rural electric cooperatives, the proposed changes seemingly would apply broadly to Missouri’s electric-power sector.

One of the bill’s measures would exempt from net-metering requirements all utilities that serve fewer than 20,000 meters. One clean-energy advocate estimated that that might amount to about 20 percent of the state’s electricity customers.

The bill, which has been introduced in both the Senate and the House, also would allow the Public Service Commission to approve of fees to be levied exclusively on utility customers who generate some of their own power. The proposed change also would allow self-governing rural co-ops and municipal utilities to create a rate structure specifically for self-generating customers

Currently, the law requires that all electric customers within the same class – say, residential – be treated the same.

Andrew Linhares, an attorney for the clean-energy advocate Renew Missouri, said, “We largely view this bill as almost entirely negative. It’s not going to bring Missouri into better alignment with what other states have in place. It’s not doing anything good for existing solar customers.

“To me, it’s not clear that net-metering customers who are members of exempted utilities would be grandfathered in. Would their service be turned off? Would they be able to sell power back to their utility?”

Missouri’s utilities took a range of positions on the bill. A spokesman for Ameren said the utility is evaluating the legislation and hasn’t yet decided where it stands.

Kansas City Power & Light spokeswoman Rebecca Galati said in an e-mail that the company shares the concerns of the state’s co-ops.

“As our net metering customer base grows, it is critical that we find a balanced approach that both supports solar while also supporting the infrastructure that would allow this energy to be used across the electrical grid. We believe this bill is a good start to the discussion about how to best address this issue.”

Empire Electric supports the bill, according to a spokeswoman.

The Missouri Public Utility Alliance has “not actively signed on” to the bills that are now before the legislature, according to Ewell Lawson, the Alliance’s vice president for government affairs.

However, the co-ops’ attorney and author of the bill, Brent Stewart, said, “We have been in discussions with the munis and the IOUs for over a year. Before we put this into bill form, they had copies of it. None of them oppose it, I can assure you of that.”

Should the legislation pass, he said, “It’s hard to say what the IOUs might do. On the co-op side, we have a lot of smaller co-ops that would immediately take advantage of this. I think there are some small munis that would move quickly to take advantage of this.”

He said a rate change for solar customers could take the form of a higher fixed monthly service fee, or the addition of a demand charge, something generally applied to large commercial customers. A demand fee reflects large spikes in electricity use.

Stewart said a two-track rate structure is appropriate because applying identical rates can, in fact, have unequal results.

“The problem we have with the current law is that distributed-generation customers are not paying their fair share of the fixed costs,” Stewart said.

Utilities across the country have attempted to institute a separate set of rules for self-generating customers, and have made a similar argument: that customers with solar panels, by decreasing their purchases of electricity, subsequently do not pay enough to cover their use of the transmission and distribution and other company assets.

The Arizona Corporation Commission last month decided to make a number of changes in the net metering law, including putting solar generators in their own class.

The smaller the utility, according to Stewart, the bigger the “subsidy” problem. That’s why he drafted the bill to exempt smaller utilities from the net-metering requirement.

Although electric bills typically feature a bill for “fixed costs” and a bill for energy used, many utilities have made the case in recent years that, in fact, the formula doesn’t reflect their costs, that the unchanging part of their costs is greater than the revenue from electricity use brought in to cover it. Stewart said that the fixed cost calculations in many cases have been kept artificially low, in order to reduce the burden on low-income customers who presumably use less electricity.

The Missouri bill is based on an assumption that the cost to serve solar generators exceeds the value they provide to the grid. A number of “value of solar” studies to date have concluded the opposite: that solar arrays on the grid provide valuable services, and should not be penalized with extra fees of the sort being contemplated by Missouri’s co-op association.

The bill would institute a few other changes on net-metering customers. It would require that they maintain a “reasonable amount of liability insurance coverage,” and that systems be designed not to exceed a customer’s annual use. Stewart said that some co-ops have complained that customers have in effect gotten into the electricity industry by installing excessively-large systems and selling substantial amounts of unneeded power to the local utility.

A committee hearing has been scheduled for the Senate bill, but not yet for the House bill. Renew’s Linhares said he thinks the bill is unlikely to pass in its current form, but could be attached to a larger bill in the course of negotiations.

If passed, he said, he doubts whether the public service commission would approve fees for solar customers. But since the make-up of the commission changes every few years, he said, a future commission could be more inclined to do that.

Karen spent most of her career reporting for the Kansas City Star, focusing at various times on local and regional news, and features. More recently, she was employed as a researcher and writer for a bioethics center at a children’s hospital in Kansas City. Karen covers Iowa, Missouri, Kansas, Nebraska, North Dakota and South Dakota.